Amid Ozempic marketing push, demand for weight-loss drugs may increase insurance premiums in Mass. next year

According to its website, the list price for Ozempic was $936 per month.David J. Phillip/Associated Press

Insurers in Massachusetts say the growing demand for weight-loss drugs will contribute to higher premiums next year, the clearest sign yet that social media buzz and aggressive marketing by pharmaceutical companies could result in higher health care costs for everyone.

At a public information session in June hosted by the state’s Division of Insurance, nearly every insurer in Massachusetts disclosed that it is requesting a premium hike. The requests ranged from 3.3 percent for Fallon Community Health Plan to 12.1 percent from United Healthcare Insurance Co. Blue Cross Blue Shield of Massachusetts HMO Blue submitted a 4 percent increase, Harvard Pilgrim Health Care sought 7.3 percent, and Tufts Health Public Plan asked for a 3.4 percent hike.

While the requests are for the individual and small employer market, which does not include people covered by large employers and Medicare and Medicaid, they could signify similar cost pressures in other commercial insurance plans as well as for companies that self-insure and cover such drugs. The hikes could also threaten to push overall increases in health care spending in Massachusetts beyond the 3.6 percent benchmark set by the state for 2024. Already, spending on prescription drugs in Massachusetts is growing at nearly double the national average.

“We’re certainly starting to see requests for [some of the weight-loss medications] and trying to control costs while getting members appropriate levels of care,” said Tyler Hutchison, chief actuary for insurer Health New England, at the hearing. He added that some studies have suggested weight-loss drugs could increase pharmacy spending by more than 20 percent over the next few years.

“We’re trying to continue to be aware of some of the risks out there and take those into account as we set the rates.”

The state Division of Insurance expects to decide on the rate increases by mid-August.

Weight-loss drugs are only one part of mounting costs, said Lora Pellegrini, president and CEO of the Massachusetts Association of Health Plans. The higher cost and wider use of inpatient and outpatient hospital care as well as other physician services are also contributing, she said.

“Prescription drug spending continues to be a significant driver of health care costs in Massachusetts, accounting for close to 20 percent of medical expenses,” Pellegrini said in a statement. She added that spending on weight-loss drugs has outpaced expectations.

Diabetes drugs that result in weight loss, such as Ozempic, and other weight-loss drugs have been around for several years, but experts point to recent social media buzz and marketing by the pharmaceutical companies that have boosted their popularity.

Ozempic’s manufacturer Novo Nordisk spent $180.2 million promoting the drug in 2022, according to advertising research firm Vivvix, published in FiercePharma — one of the top drug spenders for the entire year. Recent data from the Centers for Medicare and Medicaid Services shows the company spent $11 million on meals and travel for thousands of doctors last year, according to the medical and science news site Stat.

At the same time, spending on drugs for weight loss has risen rapidly. According to the IQVIA Institute for Human Data Science, which focuses on life science analytics, US spending on drugs for people categorized with obesity reached nearly $2.1 billion in 2022 in the United States alone — up from $500 million in 2018.

Some of the drugs, such as Ozempic, are prescribed to treat type 2 diabetes, but have been shown to result in weight loss. Other drugs such as Wegovy have been approved for patients categorized as having “obesity,” according to the body mass index, or who are overweight and have underlying conditions such as high blood pressure or high cholesterol.

And there are even more weight-loss drugs in clinical trials.

Blue Cross Blue Shield of Massachusetts expects spending on the drugs to triple in 2023, compared to the previous year. From January through April, the insurer said, there were 55,271 prescriptions for Mounjaro, Ozempic,and Wegovy — three of the biggest drugs on the market that are approved for either diabetes or weight loss.

Point32Health said it had 23,773 total prescriptions for FDA-approved weight-loss drugs among its commercial members through May of this year — nearly equal to the number for all of 2022. The insurer noted that while Wegovy was approved in 2021, it has been in short supply, and so total prescriptions could have been higher last year if there were more available.

Most commercial insurers are covering weight-loss drugs, so long as members get prior approval from their insurers, Pellegrini said. Blue Cross, the largest insurer in the state, covers the medication for those who meet the FDA-approved criteria and requires patients to first try a different method of weight loss for six months before moving to expensive medications.

Point32Health has a list of criteria for certain weight-loss drugs and authorizes them for an initial period of up to six months. It also requires that diabetes patients try certain other medications first.

Even under rates negotiated by insurance, annual spending on weight-loss drugs can reach thousands of dollars. Blue Cross said it spends between $350 and $550 a month per person for such prescriptions, with the cost borne both by the insurer and patient.

Prices without insurance are far higher. According to its website, the list price for Ozempic was $936 per month. Wegovy has a list price of $1,349 per month. Mounjaro carries a list price of $1,023.04 per month.

Medicare does not currently cover weight-loss drugs for people who have been categorized as having obesity. However manufacturers are pushing for that to change, potentially opening the door to billions of dollars in spending, even if only a fraction of those who meet the criteria for the weight-loss drug are prescribed the medication.

Some have argued that weight-loss drugs will ultimately result in long-term savings because they will improve people’s health. However, the Institute for Clinical and Economic Review, a nonprofit health assessment organization, said weight-loss medications such as Wegovy offer low long-term value for the money, compared with lifestyle modifications.

Spending on all drugs has been one of the biggest drivers of health care spending in the state. From 2019 to 2021, spending on retail prescription drugs, after rebates, grew 7.7 percent each year, outpacing increases in hospital outpatient services, inpatient services, and urgent care/doctor’s office visits, according to data from the Health Policy Commission.

Spending on prescription drugs also grew faster in Massachusetts than nationally, according to Medicare data, at 8.3 percent average annual growth from 2019 to 2021, compared to 4.4 percent annual growth nationally.

Yet high prices weren’t dissuading many from wanting the drugs. According to a new survey by STAT and the Harris Poll, almost half of Americans said they would be willing to spend up to $100 a month for new weight-loss medicines such as Wegovy. A third say they would indefinitely pay whatever they could afford to get the drugs.